BrazzilMag

Do it as I say but don't do it as I do!

So much for the american moral high ground. The USofA is a fraud populated by hypocrites.

Costinha

Crucial as these policy debates are, just as important is the policy decision that will also take place this year on whether to offer US$4 billion in government-guaranteed loans for a pipeline from the Upper Midwest to the east-coast state of New Jersey. The promoters of this pipeline, which includes the United States' second-largest ethanol producer, Poet, must know that once the government signs on the dotted line, they can just about guarantee import protection, and perhaps the continuation of the blenders credit ... forever. That is because the pipeline would never be viable if Brazilian ethanol suppliers could compete on an even playing field: the break-even point for U.S. and Brazilian suppliers would then shift westward to the Appalachian mountains.

It seems likely that the industry's fighting for extension of the blenders credit -- which many analysts now say is benefiting corn-ethanol producers very little if at all -- is also linked to the pipeline. Even if the blenders credit is not benefitting domestic sales, it could provide a huge boost to export sales. As crazy as that sounds, especially given the experience of the U.S. biodiesel industry (which was using the blenders credit to subsidize the export of 80% of its production to Europe -- until the European Commission slapped on antidumping and countervailing duties on U.S. exporters in March 2009, bringing that trade to a grinding halt), all the signs are that some U.S. producers are looking to export markets as a way to bleed off excess capacity in the United States. And the blenders credit could make all the difference in their being able to do that.

For a discussion of why the ethanol import tariff should be repealed, visit:

http://renergie.wordpress.com/2009/03/24/why-the-ethanol-import-tariff-should-be-repealed-2/

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